Coal export to China slows down
After an initial seven-month period with high growth in Mongolian coal exports to China, spurred by a ban on North Korean coal, exports have slowed down due to a hiccup at the Mongolian-Chinese border.
In September, Mongolia exported 2.31 million tons of coal to China, a four percent decrease since August. In July 2017, the export of coal decreased by two folds. The volume of export made a recovery in August, but incrementally.
Despite the recent slow down in coal exports, the first nine months of 2017 have been positive for Mongolia, having exported 25.7 million tons of coal to China. It marked a 58.6 percent increase in coal exports compared to last year, according to data from the National Statistical Office (NSO).
Mongolia has planned to export 32 million tons of coal for 2017, and 80 percent of it has already been exported.
The export of coal is likely to not increase for the remainder of 2017, note officials in the coal sector.
Beginning on July 1, the Chinese government restricted the import of coal through second-class border crossings and doubled-down on the regulation and security of other crossings. This measure has had a significant impact at Gashuunsukhait-Gants Mod border crossing, the main channel of coal exports, decreasing the previous capacity to pass through 1,600 trucks daily down to 600. This has been attributed to a double-down in border security at Gants Mod border crossing by Chinese officials, according to Chinese coal market website sxcoal.com.
The possibility of a quota on Mongolian coal exports to China has local miners raising caution. The Chinese side said they had planned to import around 15 million tons of coking coal through the Gashuunsukhait-Gants Mod border crossing in 2017. According to sxcoal.com, China was considering limiting further imports as they had exceeded their planned coal import from Mongolia.
At its peak, the Gashuunsukhait-Gants Mod border crossing was passing 1,619 trucks carrying coal a day. Beginning in July, the number of trucks passing through the border fell significantly. The Ministry of Mining reported of the dramatic decrease in the passage of trucks with the border crossing only passing through 500 trucks a day as of October 11.
Outside of coal, NSO reported that Mongolia’s concentrate copper export, all exclusive to China, had surpassed one million tons, valued at 1.15 billion MNT.